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Is Xoom International Money Transfer a Good Way to Earn Miles and Points?

August 4, 2014
by
Million Mile Secrets Million Mile Secrets

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Million Mile SecretsMillion Mile Secrets Team

Signing-up for credit cards through partner links earns us a commission. Here’s our full Advertising Policy.

What’s Xoom?

Xoom is an online money transfer company that allows you to send money to others directly from your desktop or mobile device. They advertise low fees, good exchange rates, and secure transactions which you can track via email or mobile phone.

You Can Send Money Using Your Desktop, Laptop, Tablet, or Smart Phone

You can send money to 30 countries by direct transfer to the recipient’s bank. While not all banks in each country are available, they seem to have many of the major banks on their list.

How Does It Work?

1. Sign-Up for a Free Xoom Account

Before you send money with Xoom, you need to sign-up for an account. Initially, you’ll enter your name, email address, phone number, and a password.

Create a Free Xoom Account by Entering Your Details

You won’t need to add your address or phone number until you actually make a money transfer.

2. Select Country and Amount to Send

Once you have an account, you can select the country you’d like to send money to. I enlisted the help of a friend in Canada to do my money transfer experiment. The minimum amount you can send is $25, and the maximum is $2,999. You’re also limited to:

$2,999 in 24 hours

$6,000 in 30 days

$9,999 in 180 days

Note: There are ways to get your limits increased, but you’ll have to provide additional information (like occupation, social security number, photo ID, proof of income, and proof of residence). They’ll review your details before they decide to increase your limit.

Select the Country You’re Sending Money To

You’ll be asked how much you’d like to send. They’ll also let you know what the exchange rate is. In this case, $25 US = 25.96Canadian dollars.

You’ll See What the Exchange Rate Is Before You Make the Transfer

To compare, I checked the currency conversion calculator for Wells Fargo bank to see if there was much difference. Wells Fargo’s rate was actually slightly worse. I’d get 25.59Canadian dollars for $25.

Xoom’s Exchange Rate Was Slightly More Competitive Than Wells Fargo

Out of curiosity, I checked a Canadian bank (RBC) and their rate was also a little worse than Xoom. They’d give 25.78 Canadian dollars for $25.

A Canadian Bank Also Had a Slightly Worse Exchange Rate Than Xoom

To compare, I checked the interbank exchange rate for the same day on xe.com and $1 was worth 1.0673 Canadian dollars. So $25 would get you ~$26.68. Keep in mind that consumers don’t usually get this good a rate!

The Interbank Exchange Rate Is Better Than Xoom, but Consumers Can’t Normally Get Interbank Rates

Now, I can’t guarantee that Xoom’s rates are good for all countries, but for Canada the rate is competitive.

3. Select Your Method of Payment

You can choose to send money from your bank account, debit card, or credit card. Xoom charges a fee depending on the transaction amount and method of payment. The fee for sending from your bank account is always~$5. But for debit and credit card transactions, the fee goes up the more money you send.

For my small transaction of $25, the fee to use a credit card was ~$10.

It Costs ~$10 to Send a Small Amount to Canada

The highest fee you’ll pay (if you send the maximum amount of $2,999) is ~$40. But I don’t like my friend that much! 😉

The recipient can give you the transit number and account number from 1 of their checks. The institution number automatically fills in based on the bank you’ve chosen. You’ll also need your friend’s name, address, phone number, and email address.

Enter Your Recipient’s Banking and Personal Information

5. Enter Your Payment Information

If you’re using a credit or debit card, you can choose 1 you’ve previously used for other transfers. Or you can add a new debit or credit card. You’ll have to add your billing address and phone number, too.

You Can Choose an Existing Credit or Debit Card Already In Your Account, or Add a New Card

You’ll have 1 last chance to review the transaction before you hit “Authorize Payment.” There’s a warning that you may be charged a cash advance fee from the credit card company, but I wanted to see for myself!

Double Check the Transfer Details Before You Authorize the Payment

6. Monitor the Transaction via Email

Both you and the recipient will receive emails indicating that a transfer has been initiated. It takes 2 to 3 business days for the money to arrive in the recipient’s account. Other countries may have longer wait times.

Xoom Will Email Both Sender and Recipient Advising of the Transfer

After ~3 days, the money was in my friend’s account. I sent 3 separate transactions using a Chase, Barclaycard, and Citi credit card. My friend did not get charged incoming wire transfer fees that are often charged on bank-to-bank transfers.

My Friend Received the Money a Few Business Days After Each Transaction

So Xoom is definitely easy to use, if you don’t mind paying the fees. But would my purchases count as cash advances? Would they earn miles and points and count towards minimum spending requirements?

The Results Are In

And it’s NOT good news!

All 3 banks I tried (Chase, Barclaycard, and Citi) treated these transactions as a cash advance! Cash advances can NOT be used to meet credit card minimum spending requirements.

Barclaycard also charged a $10 cash advance fee. I didn’t earn miles for the purchase, either.

And Citi also treated it as a cash advance with no miles earned.

No Luck With Citi, Either – Also a Cash Advance!

So while Xoom may be an easy way to send money to friends and family, you will NOT earn miles and points for the transaction (with Chase, Barclaycard, and Citi anyway), and will incur cash advance fees. And you can NOT count cash advances towards meeting minimum spending requirements for most credit cards.

That said, I haven’t experimented with other banks. It’s possible there are credit cards that can be used that count as a purchase and not a cash advance.

That said, I haven’t tried every brand of gift card. If you’ve found 1 that works, please let me know in the comments!

Bottom Line

Xoom is a good way to transfer money to friends and family overseas. Their rates seem competitive, and transfers take ~3 days. You’ll pay fees depending on method of payment and amount sent.

But it is NOT a method to earn miles and points or meet minimum spending requirements. All 3 credit cards I tried (Chase, Barclaycard, and Citi) posted the transaction as a cash advance, which means NO miles and points, a cash advance fee, and NO credit toward minimum spending.

I have NOT tried other banks, so don’t know if this is true for all credit cards!

Have you found a credit card that works with Xoom without posting as a cash advance? Or a debit gift card that can be used? Please let me know in the comments!

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

17comments

I have been a user of Xoom for a very long period of time and been using it to make payments in India.But, since now I have outsourced few projects to India, I have to make payments to multiple entities as well as individuals and Xoom does not address this.I have now been using Remitr which takes care of individuals as well as businesses.It almost does the same job with just an added option for business payments.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)